We have an NEC4 Option C contract D&B. The MC has proposed an alternative specification because the materials cost of an item has substantially increased. My client has rejected it on the basis that it doesn’t meet the performance spec, but the MC believes they have provided enough evidence to say it does. The specification is clear that this material is required, but the MC maintains that the NEC allows for “or similar” in any situation and if we reject it, and they believe it meets the performance spec, they can raise a CE for the change.
Does the client have to accept anything the MC proposes if they decide it meets the performance spec, despite what is written in the specification?
Hi, the Client does not have to accept any proposals from the Contractor, under clause 20.1 the Contractor Provides the Works [see 11.2(15)] in accordance with the Scope. Under clause 21.2 the Contractor submits its design to the PM for acceptance [see clause 14.1] and cannot proceed with the relevant work until the design has been accepted, there is no working at risk under this contract.
A reason for not accepting the design is that it does not comply with either the Scope or the applicable law. Check the Scope, does it say ‘similar or approved’? If it does then the Scope has been poorly drafted, in my opinion those words should never be used in a Scope, or if they are the drafter must realise that they may not get exactly what they had hoped for.
Clause 16 allows the Contractor to make a value engineering proposal in order to reduce the amount paid by the Client, but it can be rejected by the PM. Crucially, this provision is intended to produce a financial benefit, it will not work where the Contractor has under priced the original work in the Scope because they have to offer money back if they intend to use a cheaper alternative.
The key to your problem is the wording of the Client’s Scope, is it clear and concise on the performance requirements - if not then you may have a problem. Good luck.
My PM is actually part of the client organisation, hence me saying the client has rejected. But yes, they did so in their capacity as the PM.
The only “or similar” wording in the scope pertains to proprietary products. This was against my advice, but someone seems to have a good reason for it. This isn’t a proprietary issues so it seems we will be in the clear.
Thanks for your help, much appreciated.